Business Directories

Egypt current account swings back into red

Cairo, April 1, 2014

Egypt's current account recorded a deficit of $755.8 million in the six months ending December, swinging back into the red after billions of dollars of Gulf aid helped it record a surplus in the three months ending September.

The deficit had stood at $4.9 billion in the last six months of 2012. Egypt's fiscal year runs from July to June.

The current account had recorded a surplus of $757 million between July and September, boosted by the aid from Gulf states that rallied to Cairo's side after the army deposed Islamist President Mohamed Mursi.

Saudi Arabia, the UAE and Kuwait pledged over $12 billion in loans and donations, including petroleum products, after Mursi was forced out of office following mass protests against him.

"In the absence of aid you return back to the fundamentals of the balance of payments: you have obviously poor tourist revenues, remittances are stabilizing, a widening trade deficit," said Mohamed Abou Basha, Cairo-based economist at EFG-Hermes.

"In the absence of the aid, that brings you back to a deficit," he said.

The army-backed interim government has struggled to revive the economy since Mursi's removal. Former army chief Abdel Fattah al-Sisi, the general who deposed Mursi, is expected to win a presidential election to be held in late May.-Reuters